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What Trip Hawkins Learned from His First Startup Failure That Helped Him Create Electronic Arts

Not many entrepreneurs spend 11 years planning their business’s start. But from his first foray into business at age 17, Trip Hawkins knew he wanted to start one. He just didn’t know what it would do. Then, in 1971, he got a glimpse of an early prototype microcomputer at a friend’s house, and an idea began to take shape. In the future, he realized, home computers would be commonplace.

From that initial flash of insight, the biggest company in digital gaming would arise. Hawkins knew it would take time for home computers to catch on, but he began laying a course that would position him to profit from the coming electronic age.

He chose a date for his business launch: 1982. Just as planned, Hawkins did start a home-based, one-man business that year. That company became Electronic Arts, which now employs 7,600 and raked in a $677 million profit in 2010. How did it happen? Hawkins puts it down to a couple of personality traits: persistence and fearlessness.

“I was feeling completely sure of myself and totally confident about what my plans were, and pretty bulletproof,” Hawkins recalls.

The very first game

Hawkins’ interest in games began in childhood—and so did his interest in business. While still a teenage student at Harvard University, he borrowed $5,000 from his father to create a board game centered on his love of sports, AccuStat Football. The money allowed Hawkins to create several hundred copies of the tabletop game. The game was loved by players but was a commercial failure, teaching Hawkins indelible business lessons that would shape his future plans.

“It was a thorough business experience for me, as I had to design, manufacture, have a marketing plan, and even assemble the product,” Hawkins recalls. “It helped me realize I was going to be an entrepreneur, but I was also disappointed that I failed. It made me a lot more careful and thoughtful before I started EA.”

At Harvard, Hawkins graduated magna cum laude with a self-designed major in strategy and applied game theory, then added a Stanford MBA in 1978. Hawkins chose his first employer, Apple Computer, deliberately. He had seen the Apple II debut at a computer fair the year before, and wanted to work for a home-computer company.

The Jobs years

In Steve Jobs, Hawkins found a mentor who would greatly shape his outlook. It was early days at Apple: the company based in Cupertino, California, had just 50 employees when Hawkins joined.

Hawkins’ responsibilities at Apple grew over his four-year tenure, but he never lost sight of his primary goal: to acquire business savvy and watch for personal computers (PCs) to become more popular and powerful. From Jobs, he’d learned to think of himself as creative and unstoppable.

The time was growing ripe for his startup. One gaming company, Brøderbund, debuted in 1980. Hawkins heard from one investor who was interested in funding a game startup. He worried he was getting behind the curve.

His dream of starting a company had crystallized into what Hawkins thought of as his “big idea.” Most software companies, he’d realized, treated developers like serfs instead of fostering their creativity. He wanted to start a game company that would operate like a music label.

“By this time, I had experience working with prima donna software development geniuses and realized these are really creative people,” he recalls. “I began to realize I could work with them as independent artists, and treat them as artists.”

Enter the crocodile

At just this time, Hawkins read in an airline magazine about venture capitalist Don Valentine of Capital Management (which would soon become legendary Silicon Valley firm Sequoia Capital). The article related that Valentine was so intimidating that one young entrepreneur actually fainted in his office during a pitch. His management style was likened to that of a crocodile, lying in wait and listening and then rearing up to rip everyone’s ideas apart.

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